PHOTO CREDITS: The East African
By
JAMES ANYANZWA
East Africa’s grand plan of harmonising domestic taxes to eliminate harmful tax competition and promote the region as a single investment destination faces headwinds as partner states develop cold feet in agreeing on the uniform tax rules and rates for the six-member economic bloc.
A source close to the negotiations told The EastAfrican that the technical experts from member countries tasked with harmonising the varying tax rules and rates in the region have not held sessions for over a year after some member countries raised concerns over the plan to harmonise value added tax (VAT), Income tax and Excise tax which are considered critical sources of revenues for the regional economies.
The project that was conceived nine years ago in Kampala (Uganda) is yet to take root over differences by member countries on how the various tax rates — their main source of livelihoods — are going to be matched.
“The partner states have various tax levels, which means their tax rates are different, and so to agree on a common threshold was not easy. There was divergence of views for various reasons and of course revenues is one of them because the purpose of taxation is to raise revenue. There is a divergence at the partner states level on the tax rates,” the source said.
